The ifo climate crashes on schedule.
(Reading time: 2 - 4 minutes)
A month ago, we wrote in this space: In our view, it is very likely that an overwhelming majority of the entrepreneurs surveyed by the ifo Institute in March will assess their business expectations less favorably on a six-month horizon. In this case, the expectations component in the ifo climate would decline significantly - and not gradually, as in a normal business cycle, but quickly and abruptly.
At the time, we simulated how the private-wealth stock market indicator would react to such a development and reduced the equity allocation to a range between 45 and 75 percent of the individually intended equity allocation.
What we feared a month ago has now come true. The ifo Institute reported a "historic" slump in business expectations...